Maiden Holdings Beats on Q4 Earnings as Revenues Grow - Analyst Blog

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Maiden Holdings, Ltd . ( MHLD ) reported fourth-quarter 2014 operating net earnings of 44 cents a share, beating the Zacks Consensus Estimate by 12.8%. Earnings improved 47% year over year.

An improved top line offset the increase in expenses, driving outperformance in the quarter. The company continues to increase its active client count, expanding existing client relationships and growing the invested asset base.

Operational Update

Total revenue in the quarter increased 23.7% year over year to $641.9 million. Higher premiums and increased investment income shored up revenues. Revenues outperformed the Zacks Consensus Estimate of $613 million.

Net premiums written jumped 35% to $601.9 million mainly led by growth in the AmTrust Quota Share Reinsurance segment, partially offset by the Diversified Reinsurance segment. Growth in the AmTrust Quota Share Reinsurance segment was driven by continued rate increases in workers' compensation, as well as new business from the Tower Group renewal rights transaction. Lower premiums at the Diversified Reinsurance segment was attributable to one-time increases experienced in Europe due to promotional offers in the year-ago quarter.

Net investment income from Maiden Holdings was a record $31.7 million, up 25.1% year over year.

Total expense increased 25% year over year to $602.6 million, reflecting higher net loss and loss adjustment expenses, commission and other acquisition expenses, and general and administrative expenses.

Underwriting income of $13.2 million decreased 20% year over year due to weak performance by Diversified Reinsurance. Combined ratio of Maiden Holdings deteriorated 1,300 basis points year over year to 98.6%.

Full-Year 2014 Highlights

Maiden reported net operating earnings of $1.53 per share, up 30% year over year and ahead of the Zacks Consensus Estimate of $1.48.

Full-year revenues totaled $2.4 billion, up 13% from 2013 and ahead of the Zacks Consensus Estimate of $2.3 billion. Higher net earned premiums and net investment income drove the top line.

Financial Update

Maiden Holdings exited 2014 with cash and cash equivalents of $108 million compared with $140 million at 2013 end.

Total investments were $3.5 billion at 2014 end versus $3.2 billion at 2013 end.

As of Dec 31, 2014, Maiden Holdings had assets worth $5.2 billion, up from $4.7 billion at 2014 end.

Debt was $360 million at Dec 2014 end, down from $486 million on Dec 2013 end.

Shareholders' equity as of 2014 end was $1.2 billion, up from $1.1 billion at 2013 end. Return on equity (ROE) for 2014 was 13.6%, up from 10.5% in 2013. Book value on Dec 31, 2014 was $1,269 per share, up 13.9% year over year.

Zacks Rank

Maiden Holdings presently carries a Zacks Rank #3 (Hold).

Performance of Other Property and Casualty Insurers

Bottom lines at RLI Corp. ( RLI ), ACE Ltd. ( ACE ) and The Travelers Companies Inc. ( TRV ) outperformed their respective Zacks Consensus Estimate in the fourth quarter.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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